I had planned to write this week’s blog on the trip to Los Angeles. (See why I’m not in Los Angeles here.) Instead, I’m sitting in my office, fending off a very needy cat who couldn’t even handle the 36 hours we were gone. I shudder to think what she would have done if we had been gone for the full week we had planned on.

Before I left, I figured the trip would inspire the column. If I took true inspiration from the actual trip, I’d write about insurance or planning for emergencies. Of course, I dealt with both topics in the Freelancer’s Guide already. I could also write about a usually reliable chain restaurant that we nearly stopped at, until we saw that this particular restaurant was so dingy and dirty, you couldn’t see in the windows. Only the signs that had come directly from the home office were bright or fresh or inviting; everything else, from the hours sign to the name of the restaurant itself was faded and/or damaged. The access road next to the restaurant had been dug up, and the mall beside it was dying. Everything about that place screamed “fending off bankruptcy,” so of course, we drove on, to a restaurant that looked a lot more inviting.

Sad as that was—and it does haunt me, so I suspect it’ll appear in a story or blog later—I’d rather talk about the only other notable business experience on our very short trip.

On our way down, before the heat got to Dean, we stopped at a Barnes & Noble in Medford, Oregon. I’m not sure how B&N ranks its stores, but I would consider this a small B&N. You could stand in the main doorway and see every section of the store.

It was Monday afternoon, sunny and hot outside, cool inside. Surprisingly, to me at least, the store was crammed with people of all ages (including, on one side of the store, a querulous elderly woman complaining that her daughter was walking so fast there was no time to look at books and, on the other side of the store, a querulous eight-year-old girl complaining that her mother was walking so fast there was no time to look at books). A big display announcing the Nook, B&N’s new e-reader, stood a yard inside the main doorway, where the new books rack usually is. The display was actually a booth with a gigantic sign behind it. The booth had sides that were about shoulder high for me, with Nooks on them. The front, though, was a table, and on it were Nooks that customers could touch.

An employee stood behind the booth, demonstrating the Nook for anyone who wanted to know how the machine worked. Sitting near him was a professorial type who was reading a Nook. Whether or not Professor Nook was an employee is anyone’s guess, but he sure looked comfortable.

The impressive thing to me, and I do mean impressive, is that the line in front of the booth was three deep and four across for the entire time I was in the store. I was there for at least thirty minutes. The line remained, although individual people shuffled in and out. These people weren’t browsing. They were interested and thinking about buying an ereader. They just weren’t sure which ereader they wanted.

I figure that at least sixty people had gone near the booth during that half an hour, most of whom asked questions. At the checkout, I asked if this was normal. The employee there told me that there was always someone looking at the Nook, even at the deadest hours of the day. And then she told me to come to one of their Saturday demonstrations—an actual Nook seminar—to really see a crowd. I forgot to ask how many Nooks they sold at these events, but to be honest, I wasn’t interested in that number as much as I was interested in the interest. For some reason, I didn’t realize that ereaders were catching on in quite this way.

I know the statistics. Ebook sales have grown exponentially this year. They went from less than one percent of the market to seven to ten percent (depending on which source you read). While the growth is astonishing, seven to ten percent of the market means that 90-93% of all book sales are still paper copies.

The growth is continuing at an astonishing rate. Most experts believe that ebooks will be a quarter of the market by the end of 2012, and half of the entire book market in 2015. No one is saying that paper books will go away. Personally, I think paper book sales will increase if you look at the actual number of books sold rather than the percentage of books sold, and briefly, here’s why.

Bound books have existed for thousands of years. Mass-produced bound books have existed since Gutenberg. Readers know and love the form. If you love a book and must own it forever, you buy the paper version, because you know you’ll be able to read it, in that format, fifty years from now.

We don’t know what form digital books will take ten years from now, let alone fifty years from now. I don’t base this prognosis on the idea on any book model; I base it on the music model.

Since the invention of the phonograph, people have been able to own music performed by someone not in the room. The advent of recorded sound must have felt to the people at the time the way that the advent of the written word felt to people who had only heard stories told orally. Suddenly something precious could be preserved.

But music preservation formats have changed. In the late teens or early twenties, my grandfather bought my grandmother a phonograph (which we kids played with [carefully] whenever we went to her house). She kept all the records—thick unwieldy things that wouldn’t play on my parents’ expensive stereo.

In my lifetime, recorded music went through several forms: the 78 rpm record (that’s revolutions per minute for those of you who have always wondered [and look at me, explaining something every kid knew, back in the dark ages]), the 45 rpm, the 33 rpm, the 8-track tape, the cassette tape, the CD, and now the MP3 digital download (which I greatly prefer). In other words, ways to access recorded music have existed for more than a century, but those ways have always changed. I know people who rebought their entire record collection when they went from vinyl to CD and are buying enough hardware to store their digital library (okay, that second part includes me).

None of this happened with the book. The book has been stable since Gutenberg. Yes, there have been additional formats—the trade paper format, the mass market format—but they were still words, printed in ink, on paper, bound in some kind of material.

That kind of stability breeds faith. If you love a book that you read digitally, you will buy the bound version so that you will always have a copy in a reliable format.

That makes it sound like bound book sales will go down. But they won’t, because readership will increase as access increases.

Right now, only a small percentage of books get sold in actual bookstores. Because I’m tired and a bit cranky from the long (and rather stressful) drive, I’m not going to look up the actual number. But it’s surprisingly small. Most people get their books while buying something else—groceries, diapers, newspapers. The bulk of all books sold sell from places like grocery stores and Wal-Mart, not from Barnes & Noble.

Put that fact together with these two facts: 75% of all teenagers have cell phones. Smart cell phones, like the iPhone, have several reading applications. On my iPhone alone, I have three e-reading apps: Stanza, Kindle, and Borders. I’d have more, but I keep forgetting to download the app.

Other statistics have shown that people who have fiction available on their smart phones read more books than they did before they carried a smart phone. They now read like I do: in line at the bank, in the movie theater before the lights go down, as they wait for friends to meet them at a restaurant. The only difference is this: I used to carry a book with me everywhere. Most people didn’t. Now I carry several books with me in my phone, and so do they. When they get a minute, they read. They no longer need designated reading time.

As more and more people read more and more books, the number of books sold will increase dramatically. I know that I buy more books now that I own a Kindle than I did before—and I bought more than most people before.

Why am I buying more? Access. In the past, if I read a review of a book that sounded interesting, I had to remember two things: I had to remember to write down the title and author, and I had to remember to bring that paper with me to the bookstore when I visited. Since I might not remember the paper right away, I might miss my chance to buy that book in the store because a bookstore can only carry so much stock. (See Dean’s blog on books as produce [which was my analogy before he stole it.])

When Amazon.com came into being, I still had to make the transition from the review source to looking up the book on Amazon and maybe ordering it or maybe not.

Now that I own a Kindle, I read the review (often on my Kindle), then click onto the bookstore, find the book (if it exists as an ebook), and download the free sample. I don’t read the sample immediately, but when I do, I often download the entire book. Or I go to my computer at that moment, and order the bound copy. (The difference for me is this: I make margin notes in almost every nonfiction book I read, so I prefer a hardcopy. I don’t like the notation system on the Kindle or the other ereaders that I’ve seen. So I order bound copies of nonfiction, but generally order ebook versions of fiction.)

I am buying more books because I remember that I wanted to read them. Anecdotal evidence shows that I’m not alone in this. There’s another phenomenon that statistics are beginning to bear out, and again, anecdotal evidence shows that it skews young: People who buy ebooks will often buy two copies of the same book for themselves—one bound copy as well as the ebook copy. Sometimes they buy the bound book to have a permanent copy on the shelf, and sometimes they buy the bound book to read at home, and have the ebook copy to read on their phone or their ereader.

Also, statistics have shown that the number of people who read books grows each year, and has done so since the GI Bill in 1946. Yes, I know, there was that one stupid Census “study” a few years ago that showed reading had decreased, but if you actually looked in the guts of the study, you realize that some “statistician” (and that’s in quotes because no real statistician would ever do this) looked at a decline in reading in 1000 households and extrapolated that data to show that reading declined in all of America. For those of you who don’t understand statistics, let me simply say that 1000 households is so insignificant that it is closer to zero than it is to a recognizable percentage of the U.S. population. In other words, it’s not something you can viably extrapolate over millions and millions of people.

So, if more and more people are reading, and they have greater access to books, then book sales will increase dramatically. For the next ten years or so, books will be a significant growth industry. But we will lose a lot of major publishing imprints and a lot of established publishing businesses. Why? See last week’s post, Fighting The Last War. Most of established publishing doesn’t understand the upcoming change. Many of those who do understand the change don’t know how to change their business model to capitalize on that change.

So smaller, more nimble companies will take advantage of the change.

For those of us who read, these changes will make no difference to our reading habits. We’ll still buy books for ourselves and friends. We’ll still discuss them and enjoy them and think about them.

For those of us who write, these changes will either be enriching or devastating depending on the way we view the world, how quickly we change, and whether or not we’re capable of adapting. A lot of writers will see little or no change at all because they’ll continue to function in the old model—which will remain viable.

What most people don’t understand is that books aren’t changing, reading isn’t changing, and writing isn’t changing. But the delivery systems are changing.

Not very long ago, it used to be hard to get a book from writer to reader. A writer could self-publish a book, at the cost of thousands of dollars, but still she wouldn’t be able to get the book into more than a few bookstores (if any). Publishers put the book in physical form, then gave that form to their sales force. The sales force sold the book to actual distribution companies as well as to bookstores. The distribution companies also sold to bookstores. But the distribution companies also sold to grocery stores and Wal-Mart and truck stops and all those off-market places, the places where people buy the most books.

The system was and is unwieldy. Books are the only product that I know of where the producer takes all of the risk. Unsold books can be returned to the publisher for full credit. This returns system, instituted in the Great Depression to help bookstores stay alive, now costs the book industry millions of dollars. For every book purchased, another book gets produced—and destroyed. So built into the price of the book you buy is the price of an identical book that no one will read.

The returns were part of the business model, just like the difficulty of getting books into the distribution system was part of the model, just like the difficulty of getting new books noticed was part of the model.

With the personal computer, anyone could publish a book on their website, but that book would be hard to read. Many people didn’t like to read an entire novel on their P.C. No matter how hard innovators tried to change this, it didn’t work.

Then the ereader came along. The Kindle makes ereading easy. From the look of the other ereaders I’ve seen reading seems easy on those devices as well.

Ereaders are changing the distribution system. Anyone can upload a novel to Kindle, and theoretically get to thousands if not millions of readers. Same with other ebook devices.

The music industry went through the same distribution change with the advent of iTunes and other MP3 stores. Now savvy musicians simultaneously release their new music in multiple formats—MP3, CD, and vinyl, as well as cassettes. And the industry has changed accordingly.

In August, Taylor Swift’s latest single got leaked on the internet weeks ahead of the scheduled launch. In the past, her music label would have sued the leaker (if he could be found) and any site that played the song.

Now all that the label did was scramble to officially release the song two weeks earlier than planned, so that people who heard it could buy an official copy. The single leapt to Number One on iTunes within 36 hours. Yet that excited Swift less than hearing the song played on the radio—the old-fashioned way of letting people know that the song exists. The scheduled launch of the entire album is weeks away, but the new distribution systems make parts of it already available, which only seems to build excitement.

Such changes will—and are—happening in publishing now. Things change by the week. Some of those changes will occur in businesses other than publishing companies and writers. The big distributors—Ingrams and Baker & Taylor, for example—will have to adjust to changes I can’t yet foresee. Bookstores will need to scramble to become relevant. They’ll need to find new ways to get readers into the stores to buy the books there.

I think Barnes & Noble is on the right track here with the Nook. B&N offers Nook exclusives that you can only download when you’re in an actual store. I’m sure that they’ll come up with other promotions as well, things that will keep the readers packed into the brick-and-mortar store at five o’clock on a hot Monday afternoon.

I am inspired by all these changes. I knew about them before I left home on the aborted LA trip, but some of them didn’t sink in until I saw that constantly changing line of interested buyers at B&N in a small, relatively blue collar Oregon city late Monday afternoon.

This is an exciting new world for all of us touched by books. If we can only keep up with the changes….

My business blog is one of those changes for me. I would never have imagined doing this a year ago, and yet I enjoy writing each entry. If I inspire you or make you think, click the donate button or make a comment. I love hearing from you guys. Topic suggestions always welcome.

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20 responses to “The Business Rusch: The Nook Inspiration”

I’d say the question of whether people would buy e-readers has been thoroughly settled.

Also interesting was the stuff about various music formats. In fact (I know this only because of stories I read by Anthony Boucher), in the early days of the phonograph, some turned clockwise and othere counterclockwise, some had the needle move up and down, others left and right (all mono then), some had the arm move from the outside to inside, some from the middle to the outside; I don’t even want to talk about variations in speed. In one of Boucher’s stories, a character had a custom built record player, very expensive and one of a kind, whose boast was that he could play any record ever recorded on it.

Me, nowadays in Sept. of 2014, I would buy everything on Kindle if I could. Almost all the dead tree editions in my house are old; library books, or illustrated books that wouldn’t look good on my Kindle.

Btw, I’m the type of person who starts at the beginning and reads till the end. I’m in the process of working my way through these posts (already bought a copy of the Freelancer’s Survival Guide; Kindle format), and I’ll try not to comment on every old column, but I want to say I see good stuff that’s still relevant in both this post and your first one. Relevant enough that I’ll be donating.

Great post, Kris. I have Sony and Rita has a Kindle. And we have a lot of paper bound books.

Why both? Much like you I love both forms.

Access is certainly one reason I don’t buy all e-books. Here in Canada not everything is avaliable in e-book form even when it is in the US.

The second reason is the formats allowed by the different devices vary a lot. As with the early days of any new tehcnology standardization is an issue. (too bad Nook is not available in Canada)

The bottom line question for me, and I’m certain many readers, is if I could get everything I wanted on my e-reader and be able to make notes etc would I move to 100% e-books? Yes, I would. My to-be-read stacks sometimes get way too large and having them in one device would be great.

Now of course there’s always the collectors who want printed books. This is where I think the POD will be the future of print books. I can imagine a day when the POD (i.e. special edition)will be important part of the collector market.

And I think there will always be people who say I would never buy an e-reader who want print books and I think this will be part of the market for quite some time yet.

I’m wondering about the future of the used book market. I’d love to hear your thoughts.

The future of the used book market will depend on price, Russ. If backlist books can be available at $2 or $3, then there’s no reason to buy used (except for collectors). There will always be a used book market–not everything will be available electronically or in print–but it won’t be as big, imho.

Kris said: “If you love a book and must own it forever, you buy the paper version, because you know you’ll be able to read it, in that format, fifty years from now.”

I hadn’t thought of this, but you’re absolutely right. We need paper for the things we want to keep, because all these ereaders are transitional. I bet in 5-10 years they’ll be gone, and everyone will be reading on their phones.

Someday, and maybe sooner than we think, they’re going to develop a roll-up e-reader that opens like a window shade. Open just so far for the “printed” page. Open farther for newspapers and still farther for those beautiful billion color art renderings. Roll it back up and put it in your pocket (or maybe behind your ear).

In the interim, I don’t mind reading on my computer screen at all. All the e-readers have PC/Mac apps and claim purchases can be read on the dedicated e-device later. I just finished The Girl Who Kicked the Hornet’s Nest on my Mac Kindle reader. Even a laptop is physically easier to read than a large hardcover.

The only reason I haven’t jumped at the current amazingly low prices on the Kindle or other e-readers is the limited ability or total inability to shop elsewhere for price or content. Oh yeah, and the color thing, too.

We’re still in the the VHS vs Beta Max stage of things, except for the iPad, which can pretty much read everything. I want to hold out on the iPad until they add a few features (like a camera for Skype chat), but I’m weakening.

“including cereal boxes if there’s nothing else”–grin. You must have met my wife. I sometimes threaten to make her stay home until she’s finished the “to be read” bookcases (yes, plural–3 six foot tall bookcases of ‘to be read’) in our house, and she just says, “Okay! Will you take care of the kid while I read?”

To add to the ereader/color discussion, I think there are huge possibilities for color illustrated books.

For starters, the covers become truly part of the book that’s downloaded. Just look to the right at the covers on this site and imagine them missing or in b/w in the ebook version. It’s a small leap to imagine illustrations starting every chapter the same way (something that I’m actually working on for an ebook–the illustrations are the draw to pay $1 because the story itself was released for free (in html) on the web a few years ago). And obviously we can slide along the continuum to ebook graphic novels as well.

But beyond that, there are other markets that would love color. A coworker complains that the figures in the textbooks he downloads to his Kindle are hard to read because he can’t tell the red line from the blue line in the graph. I would think reference books would love color. Also children’s books, which are so heavily illustrated. Web comics have become popular these days–imagine being able to download the last year’s worth of episodes (for a small fee of course) to your colorized ereader and peruse them at your pleasure.

I’m holding out on purchasing my own ereader for a little while, but I know it’ll happen as soon as they develop one that’ll let me add the books I really want.

That’s the comment I was going to make, Ed. Illustrated books make color e-readers desirable, and we all read illustrated books as kids. I like the black-and-white e-reader, but I would prefer color. I’m with you, Kris. “True readers” read everything, imho, including cereal boxes if there’s nothing else.

I like how you suggest ereading will /increase/ print reading. It’s similar to what I think of whenever anyone goes on a “print is dying” rant, the idea that history never dies. If you look around enough, you can find someone who’s still living a medieval style life on the planet!

That’s a tangent though. The sheer amount of possibilities crawling around, even in the barest of places, is why I have so little patience for people who think “bah, nothing original under the sun”, too.

The markets could merge, but I think they’ll stay that way because true readers of books aren’t going to pay extra for color screens to show just black letters on white backgrounds.

It will all depend on 1) price, and 2) the type of color embellishments offered as part of the book. My e-copy of ‘Salem’s Lot contains some interesting and eerie photography. Granted, it’s b/w, but certain types of color images may have worked just as well.

I could see all sorts of interactive/animated maps for epic fantasies or space operas. You could track the protag’s journey, watch animated battle scenes. Drill down into a map, and see the landscapes, the towns as the writer envisioned them. I know some readers would prefer to imagine things themselves, but for something like a space opera battle, I wouldn’t mind some inserted imagery to help me keep track of which ship is where at what moment. Even some inserted dictionaries/pronunciation aids for names would be great additions.

FWIW, I am bristling a bit at the term “true reader.” I consider myself one, but I would enjoy some of the possibilities that color e-readers offer

Perhaps it’s because the store you saw was in Oregon, but I’ve been in B&N stores in both Kansas City and a KC suburb where the Nook nook was a dead spot. No customers, not even a sales person, although B&N is hiring people specifically to sell the Nooks. The main problem as I saw it was the way they were being sold — customers forced to stand at a booth whilst the seller pontificated. I thought the company should bring in tables and chairs and let the customer sit and read, showing how the Nook could work in a relaxed — and realistic — atmosphere. (Apparently someone at B&N agrees; the latest plans are to expand the booths and have tales and such. Dang, they stole my idea.)
As for the future, printed book might never go away but they’ll be a lot less. As in most new things, the adults cling to the old ways while the kids use the new stuff because it’s there until it becomes part of the background. So it will be with readers — the new generations will pick up the e-readers without thinking about it. (This idea is being undermined somewhat by the new surge in vinyl record sales, sales being pushed by young audiophiles.) Maybe where the inky book still will have a place will be as fine objects to be cherished. Plus, think of those grand art books, the ones with huge images of the great pieces of art or photography, or the maps and the gorgeous images of travel landscapes. Even the iPad as constructed now can’t compete — in size if not image quality — unless Jobs plans a version the size of, say, a tabloid newspaper.
Right now, the e-book industry is divided — compact readers specifically for books without art or only with B&W drawings and larger readers with color screens for magazines and newspapers. The markets could merge, but I think they’ll stay that way because true readers of books aren’t going to pay extra for color screens to show just black letters on white backgrounds.

I want both for my e-reader, Terry, but only because I also read newspapers on it, and I miss the photos & funnies. Fascinating the difference on the Nook sales. Still, I’m encouraged. I had forgotten what interest looks like, stuck here in my little house. 🙂

Great thought, DeAnna. I wanted to read Under the Dome that way, but the publisher delayed the e-release. I tried reading the big version, but eventually abandoned it because I couldn’t sit comfortably. Then I forgot about it until just now. Hmmm…maybe I should get the e-version now.

I’m like you, Kris. I am astounded at how much I love the e-reader. I’m heading to Germany in 2 weeks where I can’t download books (I have the wrong kind of Kindle), so I’m madly downloading for my trip. It’s fun. The last time I went to Europe, I carried books I knew I wouldn’t like very well so that I could abandon them when I was done. This is much easier (and more enjoyable).

I was debating which e-reader to buy when I won an iPad in a contest that the Chicago Tribune ran on Facebook (is that a sign o’ the times or what?). First I downloaded free books. Then came samples. Finally, a number of thrillers that I would have been reluctant to buy in paper format because I live in a small house and my bookshelves are already triple-stacked.

Within a few months, I have reached the point where the first thing I look for in a book is whether there’s an e-release. I know iPads are difficult to read in direct sunlight, but I usually read at night. My iPad is tucked into a case that folds like an easel–it rests on my lap, my hands are free, and all I have to do is turn the pages. I know paper books will remain the standard for some time to come, but the e-reader is easier for me to handle.

I love the flexibility of being able to read a sample and immediately buy the book 24/7. As a writer I should be ashamed to say this, but over the last few years I have read very few new books. Instead, I reread old favorites, in whole or in part. I’ve already read more new work in the last few months than I did all of last year. I’m planning which books to buy next. I didn’t think I would enjoy an e-reader as much as I am.

Great post, Kris. I actually have a Nook and love it. I was worried at first that I might not like it but when I asked at Barnes and Noble, they said that there was a 14 day return policy. So I tried it and I’m hooked. I actually prefer reading on the Nook which was a shock for me to say the least.

One of the things that I love about this New World of Publishing that we’re entering is just what you said: people can buy our books when they’re most excited about them. This is a wonderful development for writers. And with the low cost of ebooks they’re almost an impulse buy. Ninety nine cents to, even, 5.99 is a very low threshold to cross for most people.

It’s old school direct response advertising. Which, as far as I know, no one’s ever been able to apply to fiction. Yep, I think this is a great time to be a writer. I’d call it a new golden age but I don’t want to sound too cheesy or naive because I know there are still obstacles to overcome.

Steve, I too think we’re heading for a new golden age as writers. I think publishers have a tough time ahead as they navigate the new waters. Readers, on the other hand, will be in hog heaven. Seriously. I just read an article in the Washington Post about kids & their electronic devices. The kids are too busy with content and games and communicating to sleep. (NBC picked this up, but only as texting keeps kids awake.) In the middle of the article, one mother complained (!) that her 13-year-old daughter read until 1 or 2 every morning unless Mom confiscated the book. And that’s part of the new problems as well.

I feel like those kids. There’s too much to read, to do, to sleep. Things I want to do, like read and write, not things I have to. As you can tell, I’m thrilled about all of this.

Glad to hear you like the Nook as much as I like my Kindle. These devices are grand, I think.

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